FCC = Federal Coincidences Commission

from the one-song-of-happy-birthday-goes-a-long-way dept

The FCC took another step towards heavily regulating telephone replacement VoIP services, ruling that its providers must pay 7 percent of their revenues into the Universal Service Fund, a move which had been expected for some time. What makes the announcement a little more curious is that DSL providers won't have to pay into the fund after August, so, as Reuters puts it, "the FCC had to act to avoid a potential shortfall of hundreds of millions of dollars." Funny how DSL providers -- otherwise known as telcos -- will no longer have to pay in, while at the same time, the VoIP companies that are stealing their voice subscribers get hit with what amounts to a 7 percent tax. Given the rather chummy relationship between the current commission and the big telcos, it's pretty hard to see this as a coincidence, but instead yet another sign of the FCC commissioner's double standards on regulation and continued protection of incumbent telcos.

Since the telcos don't really sell standalone DSL, but mostly sell it bundled with POTS, the effect of removing DSL revenue from the contribution base is to reduce but not eliminate the telcos' USF obligations. They will still be paying on interstate POTS revenue (and their rates are generally much higher than the rates charged by VoIP providers) from their DSL customers.

The most sensible approach is probably to assess USF on connections rather than revenue. The chairman of the FCC is supposedly interested in permanent reform that would mostly assess USF on telephone numbers. This would be an imperfect proxy for connections that would result in a good bit of strategic behavior (tax avoidance).

Sensible thing is to ban the FCC

The easiest way to deregulate the telecom industry would be to remove all regulations. Every time the government has tried to "help" consumers it ends up hurting. Just pull the plug.

First it was killing AT&T's competition - while passing the Sherman Anti-Trust Act no less - by deciding that telecom was a "natural monopoly" and a "public good." That killed competition outright until the 1960's.

Then it was the half-assed freeing of the long-distance market by allowing MCI and Sprint to offer lower prices, but not allowing AT&T to do the same.

Then it was the 1984 breakup of the bells, because after all, seven monopolies are better than one.

Then it was the 1996 Act, that allowed companies to exploit legal loopholes to attract investor dollars that would have been better spent elsewhere.

Why is it that every unregulated industry, from auto manufacturing to zit cream, is so competitive as to be brutal, while the regulated ones are monopolies? The answer is easy.

"They should pass a law" is everyone's first reaction to any perceived injustice, and it always makes matters worse. But of course, things are so bad now they should pass a law. The one that abolishes all the other laws they have come up with over the years.

Then nobody would be paying the Universal Service Fund, or the Spanish American War tax on long-distance, or what have you.

Re:

Incredible person with actual brain, knowing something of the actual situation makes statement of clarification, instantly demolishing arguments of reactionary half-wits who wrongly assume everything and everyone is out to screw them. Where did this person come from?

Couple Questions

What happened to the days when a company would beat its rivals by offering a better product at a lower price, instead of buying political favor and influencing laws designed to squash or hinder said rivals?

- My answer to this is that i don't think it ever happened. It's been so long I am starting to think it was all an induced dream I had in the 70's.

What would happen if Microsoft were to convince that its OS is so broadly used that introducing any other OS would just further confuse the masses and hurt the industry as a whole, and that the should legislate against further non-MS OS's?

- My answer to this would be that there would be a huge out cry of foul play and actions would be taken against MS to slap thier hands. In short, everyone would be all over it.

So why is it any different with the Telcos? Why do the posters on boards such as this seem to be the only group that cares or pays attention to whats going on?

Re: Re: Put this way...

How many corruption allegations and charges have been levelled against the government recently?

You attack someone because they simply see that corruption is running amok in our system.

I won't argue that TechDirt can't make up it's mind on this one: The telco's don't offer "naked" DSL, which means DSL users pay the USF fee on the phone lines. Yet the article seems to forget that point.

Regulation built the monopolies and honest politicians could stop this from getting worse, but there are few honest politicians left. The day of the statesman is over.

wow

Looks like it has all been said. A sad state indeed when the people of this great country, the USA, just sit and watch it all happen. O, they will post about it, blog it, discuss it but they, we, won't do anything about it. We will go back to the news an post elsewhere. Take a second and at least email your congress and senate and let them know what you think. Better yet, use the link to this comment thing and send them a link to your thoughts. If no one tells them, they don't know. Even the crooked politicians must listen when over half their constituents cry out at this this this... blah. Tell them you won't re-elect them if they don't do something. It could be a wasted effort, then again, with enough feedback, they will get the hint, do it right or go home. Take the time now, before your next news article.

VoIP is Available to more than DSL Customers

As screwed up as the FCC is, and as much as I think Government involvement in anything other than keeping terrorists and other countries from trying to steal away the freedom our forefathers provided to us, the application of the USF to VoIP companies like Vonage, etc. does not remove the USF from Telcos...it simply adds another charge to a different service. Those of us who are Cable Modem subscribers without POTS lines are now going to have to start contributing to the USF as well.

$200 Billion

Yes, the government's corrupt and in bed with big businesses. Look at campaign contributions, look at who's elected, and look what legislature they try to push.

Now try to inform the everday citizen, and see if they even care. People in this country are fat, lazy and stupid, and until this mentality takes a 180 we're just going to keep electing more useless candidates. Just look at who's running for office in `08. The same meida whore's trying to milk as much attention as they can so the sells of their next book will go up. I pray for a revolution, however China will probably "reform" the US before any of it's own citizens will.